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Super Choice Employee briefing session Presented by <<Insert your name>> <<Insert your title>> <<Insert your company name here>> Agenda What this presentation covers • Why superannuation is important • How much gets paid into your super? • What is “superannuation choice” all about? • When you might receive a standard choice form. • Choosing a fund • What to look out for • Where to go for help and assistance Important information But first, some important details • This presentation has been created by HOSTPLUS for HOSTPLUS employers for the purposes of assisting and informing their employees on the topic of superannuation choice. This is a summary only. It is not a intended to be a complete or definitive statement of matters outlined in it. • HOSTPLUS does not recommend that any member, employer or employee make decisions concerning superannuation arrangements based solely on the information in this publication. This information is of a general nature. It has been prepared without taking into account your particular investment objectives, circumstances, financial situation or needs. When considering your own objectives you will also need to consider, with the help of a licenced financial adviser, whether the advice is appropriate in light of your particular investment needs, objectives and financial circumstances. This publication is also not intended to be, and should not be construed in any way as investment, legal or financial advice. • I am not legally able to provide you with financial advice. Please seek professional advice from a licenced financial adviser. • HOSTPLUS is a regulated superannuation fund and complies with the Superannuation Industry (Supervision) Act 1993 (SIS). • HOSTPLUS Pty Ltd is an Australian Financial Services Licensee – Licence No. 244392. • HOSTPLUS Pty Ltd makes no representation, warranty or guarantee, and accepts no liability, as to the accuracy or completeness of the information gathered herein. HOSTPLUS Pty Ltd excludes all liability whatsoever howsoever arising for the use of, or reliance on, the information provided. Why is superannuation important? Some essential facts • The Aged Pension may become harder to access • Super is often an excellent way to invest money for retirement • Super is generally a great personal insurance vehicle How much gets paid into your super? Some essential facts • Under „Superannuation Guarantee”, your employer must pay 9% of your earnings Eg. If you earn $50,000 per year, your employer will pay you $4,500 ($50,000 x 9%) in super • You or your employer may pay extra money into your super at any time Some common methods: • Making personal contributions from your „after-tax‟ salary • Salary sacrificing some of your pay from your „before-tax‟ salary What is superannuation choice all about? Choosing a fund • As of 1 July 2005, millions of Australians have been able to choose a fund for their future superannuation guarantee contributions • In general, you will not have to exercise choice under the „Choice of fund‟ rules if: • Your super is paid under an industrial agreement registered by a State award • Your super is paid under a certified agreement, Federal collective/workplace agreement or an Australian workplace agreement which specifies a superannuation requirement • Under the new rules, if you are a new employee after 1 July 2006 employed under a State award (now known as a „notional agreement preserving State awards‟ or NAPSA), you will receive a „standard choice form‟ • You can also request a standard choice form at anytime When might you receive a standard choice form? You may receive a standard choice form under the following circumstances: • within 28 days of commencing employment, from 1 July 2006, including State award based employees • within 28 days of requesting it in writing, provided you haven‟t made such a request in the previous 12 months • when we become aware that we are unable to contribute to your chosen fund (i.e. we are not a participating employer) • when you have chosen a fund that‟s no longer an eligible fund (i.e. a fund that has ceased to comply with superannuation legislation), and • when we change our Employer (default) fund. What does a “standard choice form” look like? Choosing a fund Part A: Where the employer nominates which fund they will make super contributions into if you do not make a choice. Part B: The section you fill out if you want to make a choice other than the selection made by your employer in Part A. Do I have to choose a fund? Your right to choose • You don‟t have to choose if you don‟t want to • If you don‟t . . . • You can do nothing and your employer will pay contributions into a fund they choose in Part A of the Standard Choice Form TIP: Make sure you understand the fund your employer has chosen. Your current fund may be different from the fund chosen by your employer. Compare the benefits and costs before deciding what is best for you. • Where contributions are being made in order to satisfy a Federal or State award that specifies HOSTPLUS, then the employer fund (also known as the Default Fund) must be HOSTPLUS Do I have to choose a fund? Your right to choose • If you do • You must complete Part B of the form and attach written confirmation from your chosen fund that states: • That it is a complying fund • That it will accept your employer‟s contributions • Information on how employers can make their contributions to the fund. • You can choose a fund at any time, but you cannot require your employer to change your fund more than once a year. Changing funds Some good and bad reasons to change Some good reasons Some bad reasons • Changing jobs where your current • Fear, just because your fund declared fund is not available with your new a one year negative return. It may be employer worth judging performance over 5 years or more • Consolidating super accounts to cut costs and paperwork • Jumping on the bandwagon of a top-performing fund. This can • Lower-cost or better services that rebound on you if, as quite often would suit you more happens, that fund performs poorly next year • Poor investment performance over a 5 year period compared with similar funds What type of fund can I join? Four basic fund types Industry • Are “profit for members” superannuation funds open Funds to people in a particular industry or under a particular industrial award. Some industry funds like HOSTPLUS are also open to anyone. Retail • Are open to the public and run by financial Funds institutions eg. Banks or Funds management TYPES organisations. OF FUNDS Corporate • Are open to people working for a particular employer Funds or corporation. (Employers may run their own plan or run it through an investment manager or a master trust). Eg. Company X super plan Self Managed • Is a “Do-it-yourself” super fund open to only you and (DIY) Funds up to three other people which requires additional cost, compliance and administration expertise. How do I find out about each fund? Start with the fund‟s “product disclosure statement” • A “product disclosure statement” (PDS) is a comprehensive booklet on a super fund and its product • It tells you what you need to know including: • Fees and costs you‟ll pay • Death and disability benefits and insurance premiums • Investment strategies you may be able to choose • Objectives of each investment strategy, its risks and likely returns • Fund features and services • These are usually available from a fund‟s website • You can download HOSTPLUS‟ at hostplus.com.au What to look out for? Tips and traps when comparing super funds • Make sure your fund is a “complying” fund • Fees and costs – all of them! • Entry fees – fees for joining • Management fees – fees for keeping your account, contribution fees, adviser fees, switching fees, etc. • Exit fees – fees if you decide to leave • Investment expenses • Insurance benefits, costs and levels • Death and Total and Permanent Disability insurance • Salary continuance insurance What to look out for? Tips and traps when comparing super funds • Compare investment options • Decide how much investment choice you need • Decide how much investment choice you‟re really likely to use • Judge investment performance • Look for a reasonable performance • Judge performance over at least 5 years • Compare like with like • Try to use the same start and finish dates for each fund What to look out for? Tips and traps when comparing super funds • Determine if the fund you choose is a consumer friendly fund • Look at a fund‟s annual report and website • What other benefits does the fund offer that may be of interest to you today? • Eg. Low cost banking services, discounted travel, health insurance at special rates, Need more help? Where you can go • www.superchoice.gov.au or phone 13 28 64 • www.fido.gov.au or phone 1300 300 630 • www.ato.gov.au/super or phone 13 10 20 • www.superratings.com.au • www.selectingsuper.com.au • www.chantwest.com.au • www.industryfunds.com.au • hostplus.com.au or phone 1300 CHOICE (1300 246 423) • Register online for the HOSTPLUS “super choice made super easy guide” or by calling 1300 CHOICE
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